What’s Happening?! Quest is negotiating to buy MCI for about $6.2 billion. Bush push to overhaul social security. 76,152 students applied to the UC system this year. Tivo president resigned over vision conflict with founder and CEO.
What’s Happening! Midterm Exam I will provide the exam answer paper. Six essay questions: 1 is worth 25 points 1 of 2 is worth 20 points 1 is worth 15 points – must answer 4 are worth 10 points
Chapter 7 Summary Implementing a Vision: Strategy, Tactics and Business Plan
Business Strategy Model Guidelines 1. What products and/or services do we intend to offer? 2. What price range of products do we intend to offer? 2. What customer targets do we intend to pursue? 3. What geographic markets do we intend to address? 4. How will we obtain products to sell to our customers? 5. How will we deal with sales to our customers? 6. What company structure do we intend to create? 7. What information systems approach will we take?
IT Based Strategies MARKET PLACE OPERATIONS SIGNIFICANT STRUCTURAL CHANGE TRADITIONAL PRODUCTS AND PROCESSES Federal Express USA Today Charles Schwab Whirlpool Xerox BancOne Boeing Frito-Lay Wal-Mart USAA L.L. Bean McKesson Figure 7-6
TARGET CUSTOMER COMPETITOR SUPPLIER THRUST DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE MODE DIRECTION OFFENSIVE DEFENSIVE USE PROVIDE EXECUTION STRATEGIC ADVANTAGE STRATEGIC OPTION GENERATOR Figure 8-1
TARGET CUSTOMER COMPETITOR SUPPLIER THRUST DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE MODE DIRECTION OFFENSIVE DEFENSIVE USE PROVIDE EXECUTION STRATEGIC ADVANTAGE Federal Express Analysis Using the Strategic Option Generator Figure 8-2
TARGET CUSTOMER COMPETITOR SUPPLIER THRUST DIFFERENTIATION COST INNOVATION GROWTH ALLIANCE MODE DIRECTION OFFENSIVE DEFENSIVE USE PROVIDE EXECUTION STRATEGIC ADVANTAGE UPS Analysis Using the Strategic Option Generator Figure 8-3
Roles, Roles and Relationship Concept *********** 1. The role of information systems is focused on competitive priorities. 2. Senior management plays a major role in positioning and prioritizing the competitive role of information systems. 3. There is an on-going working relationship between senior management and the information systems organization to sustain the successful use of information systems to compete.
Important to recognize that the IS organization is
really in three different businesses:
Designing information systems.
Building information systems.
Running and maintaining information systems.
Information Technology Computer-based Applications Organization Concurrent Learning Curves
Outsourcing Hiring someone whose expertise can perform a business function or activity better, more cost effectively and/or in a more timely manner than can be achieved in-house. Also enables the company to focus on its core competencies and those factors that mean the difference between success and failure.
Possible Exam Questions 1. Explain the importance of the roles, roles and relationships concept if a company has decided that it definitely wants to use information systems to gain a competitive advantage. 2. Can a company successfully use information systems as a competitive resource by outsourcing the management of this resource to an outside company?
Chapter 10 Introduction The Redefine and/or Define Concept and Change Management
Information technology can be a catalyst or vehicle for change.
Organizational change must be carefully managed.
Employees and management must understand and accept the need for change.
Chapter 10 The Redefine and/or Define Concept and Change Management
We live in a word of change, yet we act on the basis of continuity.
The Challenge of Change Millions of ordinary, psychologically normal people will face an abrupt collision with the future. Many of them will find it increasingly painful to keep up with the incessant demand for change that characterizes our time. Alvin Tofler Futurist
Definition of Change Making an essential difference often amounting to a loss of original identity or a substitution of one thing for another.
Equipping a company with the latest technology doesn't mean a thing if you don't alter how your employees think and how management leads them. Chad Frost President Frost Inc.
As we change what computers can do, we must change what we can do with computers. Max Hopper Former CIO Information Systems AMR and American Airlines
Value to Customer Analysis Boeing Commercial Airplane Group
CAD design system and
Customer input through network
Co-design process with customer
Quality control system
Vendor EDI system
Value to Customer Product/Service Delivery Process Commercial Aircraft What the Customer Buys Value-add Process Figure 10-4
Value to Customer Product/Service Delivery Process Product/Service Value-Add Process What the Customer Buys
Reengineering Hammer Definition: Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. Key words are fundamental, radical, dramatic and processes.
Michael Hammer Videotape The father of reengineering. At least the term.
Reengineering Business Processes Difference between business functions and business processes? Definition of a business process: A sequence of predefined activities executed to achieve a type or range of desired outcomes. Definition of process engineering: An approach to achieve radical improvements in value to customer and/or business efficiency.
Strengthen alignment of core processes to business strategies.
Pursuit of new opportunities.
Optimize cross-functional performance.
Broaden scope of activities and individual jobs to improve
responsiveness or flexibility.
Reduce operating costs.
Reengineering Guidelines 1. Senior management commitment to adopting a new process. 2. Team empowerment and decision-making. 3. Be careful about how you draw conclusions and create perception. 4. Move toward inquiry, not conclusions. 5. Make the space and time available for the official beginning with a team kickoff. 6. Reward system must be correctly focused.
Reengineering Methodology Institute Continuous Improvements Analyze Leverage Points Identify Process Breakthroughs Design Business Processes Implement Business Processes
Critical Success Factors
Activity Value Analysis
Benchmarks and Surveys
Process Prototyping and Implementation Performance Reporting Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Source: ISS Corporation
Hewlett-Packard Reengineering Lessons Learned: 1. Goals and accountability must be clear. 2. Process ownership is crucial. 3. Links among business owners, process owners and IS organization are critical.
Avon Reengineering Approach Process Culture 1. Stay Focused 1. Analyze (Opposition) 2. Be Specific 2. Educate (Concerns) 3. Deliver Results 3. Motivate (Buy-in to process)
Resistance to Change? You often don’t have a choice. There are those that content that an organization has two choices: change or die.
Graying of Auto Industry Within the next year, as many as forty to fifty percent of the auto industry workforce will be eligible to retire. Auto companies must decide if they will replace these people with similarly skilled workers or redesign their jobs and recruit more technologically advanced workers. The shortage of skilled workers is partially a result of changes in work requirements as the industry moves from an auto parts or components mentality to a systems mentality. e.g. not an odometer but an entire dashboard.
Impact of Change Change is intensely personal. For change to occur in any organization, each individual must think, feel or do something differently. Even in large organizations, which depend on thousands of employees understanding company strategies well enough to translate them into appropriate action, leaders must win their followers one by one.
Xerox: Invented plain paper copiers but almost needed to
file bankruptcy after hemorrhaging financially while trying to
become the document company.
Eastman Kodak : Basically popularized film photography
but struggled to decide if it was in the imaging business.
Digital Equipment : Created the minicomputer
segment of the computer industry but has disappeared as a
IT Related Change If IT related change could be limited to only affecting the technology, implementation would be relatively simple. Adding human factors increases the complexity of the change process significantly. Successful implementation of change requires an understanding of the human as well as the technical aspects involved in the situation. IT projects and people translate to “here comes the next wave of change.”
Old Paradigms Die Hard! They have built in resistance to their own corresponding attitudes, institutions and cultures.
The Law of Change Achieving change, of any significance within an organization, is in inverse proportion to the success that it has had up to the time that management feels a change is needed. The greater the success of the company, the less likely it is to change.
Selecting a Change Strategy Which strategy to use in approaching a change problem is a decision affected by a number of possible factors. 1.Degree of Resistance. 2.Target Population Size. 3. High, Medium or Low Business Stakes. 4. The Time Window. 5. Expertise Availability. 6. Organization and People Dependency.
Organizational cultures are easy to establish when a company is young.
Middle managers must be enlisted as agents of change for an entire organization to change the way that it operates.
This will happen only if top management communicates directly and in depth as to the logic and importance of the proposed change.
Transition Versus Change 1. It goes on inside a person, not outside. 2. It takes much longer. 3. It starts with an ending. 4. It finishes with a new beginning. 5. In between is a neutral zone. This applies to organizations as well as individuals.
Burning Platform Decision A burning platform type of decision is at hand when the organization is facing a major, disruptive change in which the cost for the status quo is prohibitively high and there is a significant risk that implementation failure could occur.